Is Sky falling in on Apple’s iTunes music model?

23 Jul 2008

The Apple iTunes store may face tough competition soon in Ireland and the UK as the British television firm BSkyB launches its new online music subscription service, with Universal Music as the first to sign up.

This new deal will bring music from the likes of Amy Winehouse, U2, Eminem and Kanye West to the new music platform, where fans will be able to both stream and download music on a per month subscription basis, which Sky claims is a world-first.

The subscription service will be available in a range of packages to suit the casual music fan, heavy music listener and those in between, Sky said.

In comparison, the iTunes music model has a set price per album (usually around €9.99) and has no ability to stream entire songs.

Also, the file formats offered by iTunes will not work across all MP3 devices, whereas the music downloads offered by the Sky service claim to be compatible with “any MP3-compatible fixed or portable device, including iPods, MP3 players and mobile phones”.

While Sky said this model is a world-first, there are some services out there which do allow for a combination of streaming whole songs and entire downloads, a case in point being the Nokia Music Store.

However, tracks from the Nokia Music Store are not compatible with any Apple iPods as they are designed to work best with Nokia music phones.

Another way users are beginning to find and listen to music is through social networking sites like Facebook and Bebo, with music services like LastFM allowing users to create their own personal radio stations based on their favourite artists.

Using customised widgets or plug-in mini-programmes such as iLike, music fans can listen, share and recommend many tracks – and all for free – with the choice of going on to buy full tracks or albums.

The emergence of these services raises some interesting questions around the trend of digital music consumption: do people prefer an ‘all you can eat’ model of listening or downloading as much music as they like as long as they keep paying a monthly fee?

Or is it more convenient to download music on a per track or per album basis? So far, Apple reigns in this space – in fact, it is officiallythe world’s most popular online movie store with over five billion songs sold since its launch in 2003.

No exact date has been set for the launch of Sky’s new music service but it is thought to be available some time later this year.

So far, Universal Music is the first music label to do a deal with Sky, but the company said it is currently in talks with other labels, both major ones and independents.

The BSkyB corporation does not own this service wholly but rather has entered a joint venture as majority shareholder, so Universal Music is not just licensing its catalogue but also becoming a shareholder in the business – an attractive proposition for music labels who wish to have more control over the profit model based around their catalogue.